TradeTheNews.com Staff
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- Following a cooler UK CPI release, sterling and gilts yields decreased in line with more rate cuts bets from BoE. On the face of it, headline came in below expectations for MoM and YoY, but core and services YoY were unchanged and higher respectively. Looking ahead, it's all about what BoE members see in the data, with Pill (Chief Economist) previously noting concern over services inflation, which rose in today’s reading.
- Euro Zone Q4 Prelim GDP stagnated with flat QoQ and YoY reading, as expected and telegraphed by ECB and EU senior officials.
- US futures point marginally higher by +0.1-0.4% in an attempt to reverse yesterday’s pain, when DJIA and SP500 had worst days since Mar 2023 following the hotter than expected US CPI.
- EU Earnings Recap: Thyssenkrupp cut FY guidance based on poor demand, with weak Q1 results; Heineken weak FY23 noted higher pricing affected volume momentum. Delivery Hero higher after turnaround into profit for FY23; Ahold Delhaize misses Q4 EPS but FY24 guidance seen as positive.
- Upcoming US Premarket Earnings: CME, GOLD, OC, R, SAH, WMB.
- Asia closed mixed with KOSPI underperforming at -1.1%. EU indices are +0.1-0.8%, Gold -0.1%, DXY 0.0%; Commodity: Brent +0.2%, WTI +0.1%, TTF -2.0%; Crypto: BTC +2.6%, ETH +3.0%.
Asia
- Japan top currency diplomat Kanda stated that recent JPY currency (yen) moves were rapid; Would take actions if needed (**Note: USD/JPY pair recently moved back above the 150 level)
- Japan Fin Min Suzuki again reiterates watching FX market with 'strong sense of urgency.
Taiwan
- US House China Panel Chair Gallagher (R-WI) to visit Taiwan during week of Feb 19th with a group of lawmakers to show support Lai Ching-te ahead of his May inauguration (**Note: Gallagher is the head of the US House China committee aimed at devising strategies to help the US compete against China).
Europe
- ECB’s Lane (Ireland, chief economist, dovish) stated that was moving in right direction on reducing inflation. Next move will be a cut, but timing to depend on data.
- Germany's Federal Govt said to plan to lower 2024 growth forecast to 0.2% in report due next week (**Reminder: German Bundesbank semi-annual forecasts cut the 2024 GDP growth forecast from 1.2% to 0.4%).
Americas
- US Treasury Secretary Yellen highlighted that 6 percentage-point drop in inflation vs peak; Hailed inflation progress even as CPI m/m gains quickened.
- Former congressman Tom Suozzi (Dem) won against Nassau County legislator Mazi Pilip (R) in New York's 3rd Congressional district special elections over former George Santos seat.
Energy
- Weekly API Crude Oil Inventories: +8.5M v +0.7M prior.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +0.34% at 484.44, FTSE +0.58% at 7,563.71, DAX +0.05% at 16,889.45, CAC-40 +0.33% at 7,650.60, IBEX-35 +0.39% at 9,964.25, FTSE MIB +0.38% at 31,254.00, SMI +0.36% at 11,182.40, S&P 500 Futures +0.41%].
Market focal points/key themes: European indices open generally lower, but took on a more mixed perspective after a the early hours of trading; lack of appetite attributed to firming yields in the wake of US inflation data; better performing sectors include utilities and communication services; among sectors pulling to the downside are consumer discretionary and industrials; the latter weakness fueled by ThyssenKrupp cutting its outlook; food & beverage subsector under pressure following Heineken earnings; earnings expected in the upcoming America session include Cisco, Equinix, CME and Occidental Petroleum.
Equities
- Consumer discretionary: Heineken [HEIA.NL] -4.5% (FY23 results miss; comments on price/mix, initial FY24 guidance), Delivery Hero [DHER.DE] +5.5% (final Q4 results), Prosieben SAT.1 Media [PSM.DE] +9.0% (raises FY24 guidance).
- Financials: ABN AMRO [ABN.NL] +6.5% (earnings; says real estate book is well diversified, no US exposure).
- Real Estate: Vopak [VPK.NL] +9.0% (earnings; buyback).
- Industrials: ThyssenKrupp [TKA.DE] -9.5% (Q1 results, cuts guidance).
- Technology: Capgemini [CAP.FR] +3.5% (FY23 results, initial FY24 guidance).
- Materials: Norsk Hydro [NHY.NO] -3.0% (earnings; buyback).
Speakers
- ECB’s De Guindos (Spain, voter) stated that must not get ahead of ourselves; Some forward-looking survey indicators pointed to a pick-up in growth further ahead. Incoming data to continue to signal weakness in the near term. Decisions to be data-dependent.
- ECB's De Cos (Spain) reiterated stance that was waiting for more information before deciding rate path. Stressed that challenges for the economy remained significant.
- ECB's Vujcic (Croatia) commented that Council seemed to be handling the inflation fight well.
- Germany Economic Ministry noted that the economic recovery could be delayed further due to strike actions, weak foreign demand and geopolitical tensions.
- Japan Chief Cabinet Sec Hayashi reiterated govt stance of watching FX moves with high sense of urgency.
Currencies/fixed income
- USD maintained its firm tone in the aftermath of recent US CPI data.
- GBP was softer in the session following UK Jan CPI data. Dealers appeared to be optimistic that inflation might ease to the BOE’s 2% target within the next couple of months and pave the way rate cuts. Focus was now on Thursday’s release of UK Q4 GDP data. Dealers noted a potential recession would further call for rate cuts after inflation stayed steady. GBP/USD at 1.2540 by mid-session.
- EUR/USD drifted lower to probe the 1.0700 level in the session.
- Japanese officials were out in force over the past 24 hours to heighten their concerns over the one-sided moves in the JPY currency. Nonetheless USD/JY remained well above the 150 area despite the verbal intervention.
Economic data
- (FI) Finland Dec GDP Indicator Y/Y: -0.6% v -0.8% prior.
- (IN) India Jan Wholesale Prices (WPI) Y/Y: 0.3% v 0.6%e.
- (UK) Jan CPI M/M: -0.6% v -0.3%e; Y/Y:4.0 % v 4.1%e.
- (UK) Jan CPI Core Y/Y: 5.1% v 5.2%e; Services Y/Y:6.5 % v 6.8%e; CPIH Y/Y: 4.2% v 4.4%e.
- (UK) Jan RPI M/M: -0.3% v -0.1%e; Y/Y: 4.9% v 5.1%e; RPI-X (ex-mortgage interest payments) Y/Y: 3.8% v 4.1%e; Retail Price Index: 378.0 v 378.9e.
- (UK) Jan PPI Input M/M: -0.8% v +0.1%e; Y/Y: -3.3% v -3.2%e.
- (UK) Jan PPI Output M/M: -0.2% v -0.2%e; Y/Y: -0.6% v -0.5%e.
- (NO) Norway Q4 GDP Q/Q: +1.5% v -0.4% prior; Mainland Q/Q: 0.2% v 0.1%e.
- (NO) Norway Dec GDP M/M: 0.5% v 1.0% prior; Mainland M/M: -0.1% v -0.1%e.
- (RO) Romania Q4 Advance GDP (1st of 3 readings) Q/Q: -0.4% v +0.7%e; Y/Y: 2.9% v 2.2%e.
- (RO) Romania Jan CPI M/M: 1.1% v 0.9%e; Y/Y: 7.4% v 7.2%e.
- (HU) Hungary Q4 Preliminary GDP Q/Q: 0.0% v 0.3%e; Y/Y: 0.0% v 0.6%e.
- (NL) Netherlands Q4 Preliminary GDP Q/Q 0.3% v 0.1%e; Y/Y: -0.5% v -0.8% prior.
- (NL) Netherlands Dec Trade Balance: €10.6B v €13.4B prior; Exports Y/Y: -1.6% v -5.4% prior; Imports Y/Y: -1.1% v -5.1% prior.
- (NL) Netherlands Dec Consumer Spending Y/Y: 0.3% v 0.6% prior.
- (PL) Poland Q4 Preliminary GDP Q/Q: 0.0% v -0.3%e; Y/Y: 1.0% v 1.1%e.
- (IS) Iceland Jan International Reserves (ISK): 784B v 792B prior.
- (UK) Dec ONS House Price Index Y/Y: -1.4% v -2.3% prior.
- (EU) Euro Zone Q4 Preliminary GDP (2nd of 3 readings) Q/Q: 0.0% v 0.0% prior; Y/Y: 0.1% v 0.1% prior.
- (EU) Euro Zone Q4 Preliminary Employment Q/Q: 0.3% v 0.2% prior; Y/Y: 1.3% v 1.3% prior.
- (EU) Euro Zone Dec Industrial Production M/M: +2.6% v -0.2%e; Y/Y: +1.2% v -4.0%e.
- (CY) Cyprus Q4 Preliminary GDP Q/Q: 0.8% v 1.1% prior; Y/Y: 2.1% v 2.6% prior.
Fixed income issuance
- (IN) India sold total INR270B vs. INR270B indicated in 3-month, 6-month and 12-month bills.
- (DE) Denmark sold total DKK100M in 3-month and 6-month Bills.
- (SE) Sweden sold SEK3.0B vs. SEK3.0B indicated in 1.75% Nov 2033 Bonds; Avg Yield: 2.4048% v 2.2194% prior, bid-to-cover: 4.01x v 5.71x prior.
Looking ahead
- 05:15 (CH) Switzerland to sell 2032 and 2045 Bonds.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell combined €2.0B in 2053 and 2054 Bunds.
- 05:30 (PT) Portugal Debt Agency (IGCP) to sell €1.5-1.75B in 2029, 2034 and 2052 OT bonds.
- 05:30 (PL) Poland to sell Bonds.
- 06:00 (ZA) South Africa Dec Retail Sales M/M: 0.2%e v 0.4% prior; Y/Y: -0.4%e v -0.9% prior.
- 06:00 (CZ) Czech Republic to sell 2032, 2034 and 2040 Bonds.
- 06:00 (RU) Russia to sell OFZ Bonds.
- 06:30 (UK) DMO to sell £3.75B in 4.625% Jan 2034 Gilts.
- 07:00 (US) MBA Mortgage Applications w/e Feb 9th: No est v 3.7% prior.
- 08:00 (HU) Hungary Central Bank Jan Minutes.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 09:00 (CA) Canada Jan Existing Home Sales M/M: No est v 8.7% prior.
- 09:00 (IT) ECB’s Cipollone (Italy).
- 09:30 (US) Fed's Goolsbee.
- 09:30 (CA) Bank of Canada Dep Gov Mendes.
- 10:00 (CO) Colombia Dec Manufacturing Production Y/Y: -5.4%e v -6.4% prior; Industrial Production Y/Y: -2.1%e v -3.0% prior.
- 10:00 (CO) Colombia Dec Retail Sales Y/Y: -2.2%e v -3.4% prior.
- 10:00 (CO) Colombia Dec Trade Balance: -$0.5Be v -$0.8B prior; Total Imports: $5.2Be v $5.2B prior.
- 10:30 (US) Weekly DOE Oil Inventories.
- 11:00 (RU) Russia Jan CPI M/M: 0.7%e v 0.7% prior; Y/Y: 7.3%e v 7.4% prior.
- 11:00 (RU) Russia Jan CPI Core M/M: No est v 0.4% prior; Y/Y: No est v 6.8% prior.
- 11:30 (IT) ECB’s Cipollone (Italy).
- 11:30 (US) Treasury to sell 17-Week Bills.
- 12:00 (DE) ECB's Nagel (Germany).
- 14:00 (AR) Argentina Jan National CPI M/M: 21.0%e v 25.5% prior; Y/Y: 255.3%e v 211.4% prior.
- 16:00 (NZ) New Zealand Government 6-Month Financial Statements.
- 16:00 (US) Fed's Barr at NABE Conference.
- 16:45 (NZ) New Zealand Dec Net Migration: No est v 2.7K prior.
- 18:50 (JP) Japan Q4 Preliminary GDP Q/Q: +0.2%e v -0.7% prior; Annualized Q/Q: 1.1%e v -2.9% prior; GDP Nominal Q/Q: 0.8%e v 0.0% prior; GDP Deflator Y/Y: 4.0%e v 5.3% prior;
- 18:50 (JP) Japan Q4 Private Consumption Q/Q: 0.0%e v -0.2% prior; Business Spending Q/Q: 0.2%e v -0.4% prior; Inventory Contribution % GDP: 0.0%e v -0.5% prior; Net Exports. Contribution % GDP: 0.3%e v -0.1% prior.
- 19:00 (AU) Australia Feb Consumer Inflation Expectation: No est v 4.5% prior.
- 19:00 (NZ) New Zealand to sell combined NZ$500M in 2027, 2033 and 2051 bonds.
- 19:00 (SG) Singapore Q4 Final GDP Q/Q: 1.4%e v 1.7% advance; Y/Y: 2.4%e v 2.8% advance; 2023 Annual GDP Y/Y: No est v 1.2% prior.
- 19:30 (AU) Australia Jan Employment Change: +25.0Ke v -65.1K prior; Unemployment Rate: 4.0%e v 3.9% prior; Participation Rate: 66.9%e v 66.8% prior; Full Time Employment Change: No est v -106.6K prior; Part Time Employment Change: No est v +41.4K prior.
- 20:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; 10~25Years and 25Years maturities.
- 22:30 (AU) Australia Jan Household Spending M/M: No est v -3.9% prior; Y/Y: No est v 3.1% prior.
- 23:00 (ID) Indonesia Jan Trade Balance: $3.0Be v $3.3B prior; Exports Y/Y: -3.2%e v -5.9% prior (revised from -5.8%); Imports Y/Y: +1.8%e v -3.8% prior.
- 23:30 (JP) Japan Dec Final Industrial Production M/M: No est v 1.8% prelim; Y/Y: No est v -0.7% prelim; Capacity Utilization M/M: No est v 0.3% prior.
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